The Financial Stability Oversight Council will take an expanded view of the term “financial stability” moving forward by examining whether regulation weakens economic growth and what can be done to strengthen the nation’s economic security, Treasury Secretary Scott Bessent said today.
The FSOC is an interagency body created by the Dodd-Frank Act to identify risks to financial stability. In a letter released as part of the council’s annual report, Bessent – who is FSOC chair – said the law did not define the term financial stability, which historically focused on vulnerabilities to the financial system. However, financial stability is also dependent on economic growth and economic security, he said. The cumulative burdens of regulatory and supervisory regimes are rarely considered for the former, while the latter requires the U.S. financial system to have the resources to support Americans’ standard of living.
“This focus on economic growth and security will be reflected in the council’s future approach to identifying priorities, evaluating risks and recommending regulatory or supervisory change,” he said.
Bessent said the council has formed new working groups on market resilience, household resilience and artificial intelligence. It will also focus on crisis preparedness to support interagency efforts to prepare for cyberattacks or disruptions to critical service providers, and threats from technological advancement and geopolitical risks.
